Silver Price Forecasts: XAG/USD flatlines around $84.00 as the US Dollar steadies
- Silver treads water around $84.00 as the US Dollar finds some footing
- Strong US payrolls figures prompted investors to dial down Fed easing bets.
- XAG/USD maintains its bullish trend intact although momentum has faded.
Silver (XAG/USD) posts marginal losses on Thursday, trading near $83.70 at the time of writing, yet with the $ 86.30 weekly high at a short distance and the immediate bullish trend intact. The white metal’s recovery from last week’s lows near $65.00 stalled following upbeat US Nonfarm Payrolls data on Wednesday, but downside attempts remain limited so far.
The US Dollar Index, which measures the value of the Greenback against a basket of six majors, found some support after January’s payrolls revealed a strong growth in net employment.
The 130K new jobs created last month eased investors’ fears about the health of the US labour market and prompted investors to pare back hopes of immediate Fed cuts. The USD picked up against its main peers following the data release, but it is struggling to find follow-through on Thursday, which keeps precious metals buoyed.
Technical Analysis
The 4-hour chart shows XAG/USD trapped between the 50-period Simple Moving Average (SMA) at $81.68, and the 38.2% Fibonacci retracement of the late January - early February selloff, at $86.79.
Technical indicators show a neutral bias. The Moving Average Convergence Divergence (MACD) line stands above the Signal line near the zero mark, while a positive but contracting histogram suggests fading upside momentum. The Relative Strength Index (RSI) is near the 50 midline, reflecting balanced forces.
The constructive pattern from last week's lows remains in play. Above the mentioned $86.79 level, the target is the confluence of the 50% Fibonacci retracement and February 4 high, at $92.20. On the downside, a bearish reversal below the mentioned SMA, now near $81.70 and the February 10 low in the $80.00 area, would bring the February 5 low, near $65.00, back into focus.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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